The United States District Court for the District of Columbia has vacated the SEC resource extraction disclosure rules.  In so doing, the Court noted:

  • The Dodd-Frank Act did not require that issuers’ resource extraction reports be publicly disclosed.  Use of the phrase “annual report” does not command public filing.
  • The SEC made an error by assuming that the reports should be made public because the Exchange Act is fundamentally a public disclosure statute.  Other provisions of the Dodd-Frank Act require the SEC to make available a public compilation to the extent practicable.
  • The compilation required by the Dodd-Frank Act does not require an issuer-by-issuer compilation of data.
  • Four countries, Angola, Cameroon, China and Qatar, prohibit public disclosure of payment information.  The impact of these host country laws could add billions of dollars to affected issuers costs and have a significant impact on the issuers’ profitability and competitive position.  The SEC could have used exemptive authority to avoid these problems but did not.